Michael Burton 12 April 2018

Business rate pilot councils could see £870m cash boost says think tank

Business rate pilot councils could see £870m cash boost says think tank image

Local authorities are missing out on millions of pounds because of an £870m cash boost to business rate pilot councils, according to a study today from the respected Institute for Fiscal Studies (IFS) think-tank.

The IFS report found that the 147 councils that have been selected to experiment with a 100% business rate retention scheme (BRRS) will between them benefit by £873m in 2018/19.

Had the £873m instead been handed out to all English councils they would have received 2% extra funding worth £16 per head while one in 10 areas would have received £9m in extra funding. 

The report read: ‘This revenue could have been used to reduce the budget deficit or fund tax cuts or higher central government spending. There is therefore an opportunity cost to the 100% business rates retention pilots.’

Despite their cost, the scope for learning from the pilots is ‘limited’ according to the IFS because the pilots - being ‘non-random’ and chosen by the Government - are ‘unlikely to be representative of all councils’ and because the length of the experiment is too short.

For more analysis on this report, please visit The MJ (£).

Why has the move towards 100% retention of business rates been so slow? Read our feature here.

Councils vs network operators? image

Councils vs network operators?

The Electronic Communications Code reduces red tape, but in doing so it cuts the potential revenue property owners stand to make and risks pitting local authorities against operators. Zoe Wright reports.
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